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Proposed acquisition by Sun Dreams of certain casino interests and land in Peru
SUN INTERNATIONAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1967/007528/06)
Share code: SUI
ISIN: ZAE000097580
("Sun International" or “the Company”)
PROPOSED ACQUISITION BY SUN DREAMS OF CERTAIN CASINO INTERESTS AND LAND IN PERU
INTRODUCTION
Sun International acting through its subsidiary Sun Dreams S.A. (“Sun Dreams”), has entered into and
concluded a share purchase agreement (“the SPA”), with Thunderbird Resorts Inc. and Casinos Peruanos
S.A. ( collectively “the sellers”), whereby Sun Dreams has agreed to acquire from the sellers 100% of
certain Peruvian companies that operate four gambling operations in Peru and which includes certain
immovable property on which one of the casinos is located (collectively “the target assets”), on terms and
conditions more fully set out in the SPA and as summarized below (“the proposed Acquisition”).
The salient terms and conditions of the proposed Acquisition as set out in the SPA are as follows:-
- Sun Dreams has agreed to acquire one hundred percent (100%) of the issued ordinary share capital
of various Peruvian companies which are owned by the sellers and which includes certain
immovable property situated in Peru;
- Thunderbird Hoteles Las Americas S.A., a subsidiary of Thunderbird Resorts Inc. in Peru, has agreed
to be jointly and severally liable for all the obligations, commitments, undertakings, representations
and warranties assumed and provided by the sellers under the SPA, which is underpinned by an
amount of US$2.6 million cash held in an Escrow account;
- the closing date which will be the effective date of the proposed Acquisition will be on or before 31
January 2018 provided that all of the suspensive conditions set out in the SPA have been fulfilled
(or where appropriate waived) by the parties (“the closing date”);
- the proposed Acquisition will be subject to the standard warranties and indemnities associated with
transactions of this nature, as well as the fulfillment (or where appropriate waiver) of the suspensive
conditions set out in this announcement and more fully described in the SPA; and
- the proposed Acquisition and the SPA will be governed by and interpreted according to the laws of
the State of New York.
NATURE OF BUSINESS OF THE TARGET ASSETS AND SUN INTERNATIONAL
The four gambling operations owned by the sellers are responsible for operating casinos, restaurants, slot
machines and/or other gaming and leisure and entertainment related businesses throughout Peru. The
immovable property which Sun Dreams intends purchasing is the property on which the Fiesta Casino is
located in Lima, Peru.
Sun International is a public listed company which is a leader in the gaming and hospitality industry in
South Africa as well as in various countries in Central and South America, which include Chile, Colombia,
Peru and Panama.
The Company operates a number of casinos, hotels, as well as entertainment and food and beverage
facilities through its subsidiaries in South Africa, Africa and Latin America.
RATIONALE FOR THE PROPOSED ACQUISITION
In recent years, the Company has publically declared its intentions of growing its gaming and hospitality
businesses not only locally in South Africa but also internationally in Latin America (“Latam”).
The proposed Acquisition represents an opportunity for Sun Dreams to strengthen its position in the Peru
market and diversify its asset base in Latam.
Accordingly the Sun International board has deemed it prudent to proceed with the proposed Acquisition.
EFFECTIVE DATE OF THE PROPOSED ACQUISITION
The proposed Acquisition by Sun International, through its subsidiary Sun Dreams, of the target assets will
become effective on the closing date.
ACQUISITION CONSIDERATION
The purchase price payable by Sun Dreams to the sellers to acquire the target assets set out in this
announcement shall be US$ 26 million which includes certain immovable property valued at
US$ 10 million (“the Acquisition Consideration”).
NET ASSET VALUE OF AND NET PROFIT AFTER TAX ATTRIBUTABLE TO THE TARGET ASSETS
The book net asset value of the shareholdings held by the sellers in certain Peruvian companies and the
immovable property, as at 30 June 2017 (being the date of the most recent published unaudited interim
financial results) and fully consolidated in Thunderbird Resorts Inc.’s accounts, to be acquired by Sun
Dreams, amounted to US$ 9.1 million. For the six month period ended 30 June 2017, the target assets
generated a net profit after tax of US$ 768 000 including finance charges of US$ 289 000.
During the twelve month period ended 31 December 2016 (as reported in the published annual audited
consolidated financial results of Thunderbird Resorts Inc.), the target assets generated EBITDA of
US$ 4.2 million and a net profit after tax of US$ 900 000, including finance charges of US$ 882 000.
The accounting framework applied in the preparation of the aforesaid numbers was the International
Financial Reporting Standards (“IFRS”).
SUSPENSIVE CONDITIONS TO THE PROPOSED ACQUISITION
The proposed Acquisition is subject to:
- the transfer of the immovable property from the sellers to Sun Dreams or its nominee;
- the conclusion of certain key agreements pertaining to shared services employees, trademarks
and brands;
- the repayment and settlement of various outstanding loans by certain member companies of
Thunderbird Resorts Inc. to third parties including inter-company loans plus the release of
associated securities;
- there being no material adverse events affecting the sellers or the target assets between the date
of signing of the SPA and the closing date; material adverse events being described as any event ,
fact or circumstance that materially affects the ability of the sellers to consummate the proposed
Acquisition or perform their obligations thereunder;
- the conclusion of certain shareholder meetings to reconstitute the various boards of the target
assets; and
- the obtaining of all regulatory approvals (to the extent that the same may be required or waived)
pertaining to the proposed Acquisition in Peru, including but not limited to the relevant gambling
board approvals.
FUNDING OF THE PROPOSED ACQUISITION
The Acquisition Consideration to acquire the target assets in Peru will be settled in cash, utilising Sun
Dreams’ current cash reserves.
CATEGORISATION OF THE PROPOSED ACQUISITION AND SHAREHOLDER APPROVAL
The proposed Acquisition is classified as a Category 2 transaction in terms of Section 9.15 of the JSE
Listings Requirements and accordingly will not require Sun International shareholder approval.
By order of the board of the Company
Sandton
11 October 2017
Sponsor to Sun International
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 11/10/2017 08:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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